Message by UNEP Deputy Executive Director on Legal Preparedness for the Green Economy

Distinguished guests, ladies and gentlemen,

It is an honor to address you today so shortly before the Rio+20 Summit on this issue of legal preparedness for the green economy.

I thank the International Development Law Organization not only for inviting me and organizing this event, but in particular for giving me the opportunity to highlight once again how important an adequate legal and institutional framework is for the much needed shift to a green economy and sustainable development.

Global summits for the past 40 years have repeatedly affirmed that the planet is in peril, that urgent and concerted action is needed, and that the future of human kind is at stake.

However, notwithstanding undeniable progress since then, notwithstanding the adoption of a great variety of multilateral environmental agreements, we have not yet reversed the rate of environmental degradation worldwide, nor have we been able to eradicate poverty.

In addition, the world is now faced with new challenges, such as the global financial crisis and threats to food security, to name but a few. Climate change is exacerbating the existing problems.

How can we better address these enormous challenges? It is my conviction that we cannot do it without strengthened law and governance. In fact, establishing new and strengthened legal mechanisms and institutional frameworks based on law is a prerequisite for the transformative change needed.

Building adequate legal and institutional frameworks has over the last 40 years been at the heart of the activities of UNEP. On the global level, UNEP has promoted the development of a big portion of international treaties on the environment.

Multilateral Environmental Agreements now constitute a wide and strong web of rules, institutions and cooperation mechanisms that have resulted in some remarkable progress for our global environment, as exemplified by the way the Montreal Protocol has reversed the trend of ozone depletion.

Multilateral environmental agreements play a significant role in promoting green economic activity. For example, the UNFCCC and Kyoto Protocol are among of the most significant factors to drive the transition to a low carbon and green economy, for example through the clean development mechanisms and emission trading requirements.

Certainly, more needs to be done at the global level. Changing international trade rules can have significant influence on green economic activity, enabling or obstructing the flow of green goods, technologies and investments. For instance, the current Doha Round of trade negotiations offers the opportunity to remove harmful fisheries subsidies that often contribute directly to overfishing. And hopefully we will be able to significantly strengthen our institutional framework for sustainable development in a couple of days here in Rio.

However, while effective international law and governance is essential in particular in the area of the environment, we must not forget that in the end, change on the ground requires changing laws and institutions at the national and local level.

The slow changes on the ground can often be attributed to an implementation gap: we witness a growing discrepancy between the large body of international environmental legal rules on the one hand and the lack of implementation of these rules on the national and local level on the other.

UNEP has developed a particular expertise to support countries in their development of national legislation. UNEP is now supporting a number of countries in Asia, (Cambodia, Vietnam, Lao PDR, Myanmar and Mongolia) Africa (Burundi, Kenya, Rwanda, Uganda and Tanzania) and Latin America and Caribbean in the development of new legislation frameworks or the improvement of existing ones for promoting green economy. UNEP is also planning to develop the guidelines for national legislation in this regard.

This is of course only the tentative beginning of what is an immense task. Much more work is needed to make the transition to a green economy a reality. Work as is being done by the International Development Law Organisation.

I want to take this opportunity to express my appreciation and respect for the extraordinary work that the IDLO has done in this field. The Compendium on legal best Practices in the Green Economy that is being launched today is another great achievement in this respect. This work greatly complements UNEP's report "Towards a Green Economy" by pointing to concrete legal practices and mechanism needed to implement the concept and vision expressed in UNEP's report.

Indeed, a great number of very successful examples and legal best practices have been developed over the last few years. They are evidence that change is on its way, and that change is possible. They also demonstrate the variety of opportunities for promoting the green economy through legal and policy frameworks.

Let me take a few moments to highlight some of these opportunities.

1.First, there is the rather traditional area of public planning law. Legal tools including environmental impact assessment and strategic environmental assessment play an increasing role in planning and authorization of economic activities worldwide. These laws are changing the way investments are made and carried out.

For example, an increasing number of countries have expanded their Environmental Impact Assessment laws to include such assessments, including all EU countries, China, Japan, South Korea, Vietnam, Indonesia, Mongolia, Timor Leste, Maldives, Lao PDR.

2.Another approach is to establish and enforce technical standards for products and/or processes and production methods. Standards which enhance energy efficiency or set targets for emission reductions can be effective tools for achieving environmental objectives and for enabling markets in sustainable goods and services.

New Mexico's Sustainable Development Testing Site Act for instance sets standards for a number of sustainability criteria including construction, proper sewage treatment systems and energy efficiency standards. If designed in a non-discriminatory way, such standards and production methods can be developed in consistence with WTO law (e.g. Article XX GATT in principle allows such measures).

3.Law can further indirectly change the behavior of individuals and companies by establishing incentives for environmentally-friendly behaviour or production. In the energy sector, a good example is the legislature establishing feed-in tariffs, as applied through legislation in German, Japan, China and many other countries with an aim to encourage renewable energy development and to ensure the investment returns for investors.

In Germany, one of the most industrialised countries in the world, feed-in laws have been instrumental in raising the contribution of renewable energies to the total energy consumption from 3.8 percent to 12.2 percent in just about 10 years. Brazil's Programme of Incentives for Alternative Energy Sources aims at 10% of energy from renewable sources by 2022.

4.Incentives can also be set by amendments to fiscal laws. Providing tax credits and subsidies or removing harmful subsidies can incentivize green economic development.

New York State in the United States adopted financing legislation in 2011 to dramatically expand the state's new energy efficiency retrofitting program by providing tax credits and loans to developers. Public funding mechanisms for technology development and capacity building are also significant in this respect. For instance, China's Clean Development Mechanism establishes a CDM Fund to fund climate-friendly technology development and capacity building for small- and medium-sized enterprises.

While these examples are promising new beginnings, we will not make any real progress if we do not change some of the fundamental rules of our economic systems. We need to change the legal frameworks for economic activity so that they adequately reflect the real value of natural resources and environmental services.

Emission trading is a step into that direction. There are also some experiences in regulating clean water and waste water pricing in many countries. Yet regulating payments for environmental services (PES) is largely done through the voluntary, conditional agreement between "sellers" and "buyers", for example, over forest carbon credits (forest carbon projects) in Belize, Bolivia, and Brazil. However, a few countries are developing and revising their framework environmental law, including Timor Leste, Maldives and Lao PDR, so as to include the concept of PES and required for the formulation of specific regulations to implement it.

On a final note, I would like to stress some general and cross-cutting requirements that legal frameworks for supporting green economy must meet.

First, effective environmental governance to a large extent depends on rules guaranteeing transparency of decision-making and planning, public participation of civil society and access to justice. Efforts are underway to finally implement Principle 10 of the Rio Convention on global and national levels. We will discuss the prospect of a Principle 10 Convention at Rio+20, and the UNEP Governing Council has adopted Guidelines on Access to Information, Public Participation and Access to Justice for national legislatures already in 2010.

The second requirement and my final remark relates to social justice. Environmental laws and regulations are needed to ensure human well-being and long-term prosperity through safeguarding the resources on which we all depend. But we must design our policies and laws in a way that avoids at all cost unintended consequences leading to increased injustices and poverty. In particular in developing countries the livelihoods of a great number of people directly depend on the environment and natural capital for their survival. Legal and institutional reforms targeting the management of natural capital can have a strong positive but also negative impact on their livelihoods if not properly designed. Legal empowerment of those affected through legal and institutional rights as well as legally ensured access to benefits derived from natural capital can provide much needed safeguards in this respect.

To conclude, I am now looking forward to a fruitful discussion of best legal practices to achieve a green economy that not only integrate environmental and economic concerns, but that are at the same time inclusive as well as socially just.

Because only if we manage to find model practices that integrate all these elements will we be able to fulfill the promise which lies at the heart of sustainable development.